Fear of Missing Out (FOMO) In the Housing Market Category: First Time Buyer, Home prices in Vancouver have increased for the 6th month in a row.Wait, what?! Prices are increasing again? Even as rates are increasing?In 2021 we had some of the biggest increases to house prices, culminating with a high in Q1 2022. But, rates started to increase and there was a … pause(?) … a panic(?) … a tempering of the housing market when rates started to increase and then increase dramatically. Remember, rates increased faster than at any other time in Canadian history. This created something called “anchoring affect” with many purchasers.The anchoring effect is a cognitive bias where an individual’s decisions are influenced by a particular reference point or ‘anchor’. Since everyone was used to low rates of 2021 and the first bit of 2022, the second half of 2022 and beginning of 2023 provided for lower-than-expected demand. Yes, there was lower inventory (fewer houses on the market) than normal, but we were seeing a balanced market (not a sellers market where prices can increase, or a buyers market where prices may decrease) for a timeNot anymore… Prices are up. Demand is up. Multiple offers are back. Where Are All the Listings? Andrew Lis, The Real Estate Board of Greater Vancouver’s Director of Economics and Data Analytics (phew, mouthful), has a great theory on why homeowners are not listing their properties. Specifically, it has to do with who, in Canada, has mortgages, what demographic tends to move, and that it’s all correlated to interest rates. A very interesting 6 min video! OK, back to our FOMO.Queue in the March 8, 2023 Bank of Canada announcement that they are going to pause increasing interest rates. Moreover, fixed rates actually started to come down a bit in March of 2023. This gave home buyers some breathing room.I think anchoring again came into affect here. I think most people see higher rates as being the new normal, and when we were looking at rates of 5.49%, and they came down to 4.59%, it seemed to many that it was a good time to buy.As an aside, rates have increased quite a bit over the past month, and we’re back up to low 5s.Ever since the end of March, the market has been moving faster and faster.From our discussions with our clients, the main sentiment we get is that there’s a need to get a toehold in the Canadian Real Estate market. If not now, then when, if ever?!Gone are the conversations that interest rates are too high to purchase. High interest rate are expected and are not impeding those who choose to purchase a property right now.Renters Take NoteNow, I’m not a 100% believer that everyone needs to purchase. Some people do and some people don’t.If you’re renting, and your rent is below market, you might want to hold on and keep saving. And, what if you’re in purpose built rental housing, where the landlord is a company and not an individual? It would be very difficult for the landlord to kick you out for “family reasons.” There are just too many laws prohibiting evicting tenants.Notwithstanding, we’ve had more than a few people who have had to move out and purchased this year because they themselves have been kicked out of their homes by landlords who claim owners use of property.So, why purchase if your rent is low?! I’m not sure you should… Happy to discuss 🙂But, if you have to move, or you’re currently living at market rent (what everyone else is paying), purchasing still makes sense, even with higher interest rates.We have 4 step tools to show how, even at current rates, purchasing now would provide for a better 5-year net investment than renting. Let me know if this interests you.And, if you, like me, also think property prices are going to continue to increase, you may also want to purchase. EXTRA – What Makes a Good Life?Lessons from the Longest Study on Happiness 🙂 I just love this TED Talk. Robert Waldinger, the 4th director of Harvard’s Study of Adult Development, shares timeless lessons in happiness. Image above takes you to Youtube. This link takes you to TED Talks (better transcript) The study found three important lessons: Good relationships keep us happier and healthier. Period! The quality of your close relationships matter. Good relationships protect our bodies and our brains. Mr. Waldinger’s last minute of the speech is here: “So this message, that good, close relationships are good for our health and well-being, this is wisdom that’s as old as the hills. Why is this so hard to get and so easy to ignore? Well, we’re human. What we’d really like is a quick fix, something we can get that’ll make our lives good and keep them that way. Relationships are messy and they’re complicated and the hard work of tending to family and friends, it’s not sexy or glamorous. It’s also lifelong. It never ends. The people in our 75-year study who were the happiest in retirement were the people who had actively worked to replace workmates with new playmates. Just like the millennials in that recent survey, many of our men when they were starting out as young adults really believed that fame and wealth and high achievement were what they needed to go after to have a good life. But over and over, over these 75 years, our study has shown that the people who fared the best were the people who leaned in to relationships, with family, with friends, with community. So what about you? Let’s say you’re 25, or you’re 40, or you’re 60. What might leaning in to relationships even look like? Well, the possibilities are practically endless. It might be something as simple as replacing screen time with people time or livening up a stale relationship by doing something new together, long walks or date nights, or reaching out to that family member who you haven’t spoken to in years, because those all-too-common family feud stake a terrible toll on the people who hold the grudges. I’d like to close with a quote from Mark Twain. More than a century ago, he was looking back on his life, and he wrote this: “There isn’t time, so brief is life, for bickerings, apologies, heartburnings, callings to account. There is only time for loving, and but an instant, so to speak, for that.” The good life is built with good relationships. Thank you.” Continue Reading: Read Article No Rate change & Eitan's Economic Summary Category: Education and Learning, No Rate Changes: The Bank of Canada kept their overnight (Bank of Canada Prime) rate at 4.5%. This means that the Bank Prime rate is 6.70%. *For some TD Bank variable rate mortgage holders, the TD Mortgage Prime is 6.85%. On January 25th, the Bank of Canada (BoC) said they would hold rates steady and have a pause in any rate […] Read Article Read Article Eitan's Coffee: Not Too Hot... Not Too Cold... Category: First Time Buyer, If the coffee gets too cold, we could put a few logs on the fire to increase the heat. If the fire gets too hot and the coffee is in danger of burning, we could spread the logs out and let the fire die down a bit (gosh, I love making fires when camping). There is a sort of equilibrium here with just logs. Read Article